For billionaire Bill Ackman, it may be that three seats on the board of directors of Automatic Data Processing (ADP) are worth causing a fuss about. According to a report by CNBC, the manager of Pershing Square reportedly threatened the payroll processing company with a wave of negative publicity if he were to have to engage in a formal proxy contest for the three board seats. That report comes from ADP itself, which may be trying to preempt any bad press that Ackman could release. The news comes just days after ADP formally rejected Ackman's three nominees for the open board seats, and it marks the latest in a string of tense battles between the hedge fund manager and the company.

ADP, Ackman, and Activist Investing

Ackman, known for presenting himself as an activist investor who targets companies to exert influence upon in order to shake things up in search of larger profits, has been battling with ADP for several months. Ackman reportedly has a "transformation plan" to rearrange the membership of the company's board and hopes to "double" the price of its shares. ADP revealed details of its prior negotiations with Ackman in a regulatory filing released on Tuesday, after the company had rejected the billionaire's board nominees.

For Ackman's part, the billionaire money manager hoped to secure the board seats without resorting to a proxy contest, as that would require that there by public disclosure, which in itself might generate a widespread perception that Pershing Square and ADP are "at war," according to the company's filing. As it turns out, whether or not the proxy contest occurs, it may be that the perception of a heated battle emerges to the broader public nonetheless.

Ackman Changed His Tone

After Tuesday's filing by ADP, Ackman has reportedly softened his tone. A report by the New York Post suggests that the hedge fund leader emailed the executives of ADP on Thursday in an effort to reduce tensions. "It appears that there have been misunderstandings over the past few weeks which unfortunately have clouded what should have been a productive relationship from the start," he wrote to ADP CEO Carlos Rodriguez and Chairman John Jones.

This comes just two weeks after Rodriguez referred to Ackman as a "spoiled brat" who was attempting to pressure ADP with negative media coverage. Jones denounced Ackman's three board nominees earlier in the week, saying that they had insufficient "additive skills or experience." Ackman himself was one of the nominees. Public knowledge of Ackman's accumulated stake in ADP shares emerged late in the month of July, but ADP itself took the matter to a wider audience on August 4th, when it asserted that Ackman was looking to take control of the company and oust Rodriguez from the leadership position.

 

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